As of 3:30 p.m. ET, the Dow Jones Industrial Average rose 38.9 points, or 0.28%, to 13864, the S&P 500 climbed 6.9 points, or 0.46%, to 1502 and the Nasdaq Composite advanced 20.9 points, or 0.67%, to 3151.

Not even Apple (AAPL) could halt Wall Street's New Year's rally. The Dow and S&P 500 are both trading at their highest levels since 2007, before the financial crisis roiled the markets. The blue-chip average is also having its best start to the year since 1987.

Sentiment got another lift on Friday after Procter & Gamble (PG) unveiled quarterly earnings and sales that easily beat expectations. The blue-chip consumer products company also lifted its full-year outlook. Halliburton (HAL), one of the world's biggest oilfield-servicing companies, also posted stronger-than-expected results on the top and bottom lines.

Still, Microsoft (MSFT) posted mixed results after the close on Thursday. Its profits beat forecasts, but sales came in slightly shy.

Then in Europe, a closely-watched survey from the Ifo Institute showed business sentiment in Germany rising for the third month in a row in January. The data suggest that Europe's biggest economy could be picking up steam even as neighbors are still reeling from the impact of the continent's debt crisis.

"The IFO suggests the German economy is improving more quickly than the rest of the region, and in stark contrast to the information available for other core countries such as France, where survey data for January have weakened and surprised to the downside," analysts at Nomura wrote in a note to clients.

Indeed, data released Friday showed the U.K. economy contracted by 0.3% in the fourth quarter, a steeper decline than the 0.1% economists expected.

Meanwhile, sales of new U.S. single-family homes fell 7.3% in December to a 369,000-unit annualized rate, less than the 385,000-unit rate analysts were expecting.

Oil prices ticked lower. The benchmark contract climbed 7 cents, or 0.07%, to $95.88 a barrel. Wholesale New York harbor gasoline rose 0.44% to $2.875 a gallon. In metals, gold fell $13.30, or 0.8%, to $1,657 a troy ounce.

Foreign Markets

The Euro Stoxx 50 climbed 0.78% to 2744, the English FTSE 100 rose 0.31% to 6228 and the German DAX rallied 1.4% to 7858.

In Asia, the Japanese Nikkei 225 surged 2.9% to 10927 and the Chinese Hang Seng fell 0.08% to 23580.